Single Touch Payroll (STP)

Single Touch Payroll
Single Touch Payroll has been talked about within the business community for a while now and I thought it was a good topic to tackle this month.

What is it?

When any “pay event” happens, details will be reported to the ATO

When do we pay PAYG?

This is a report only function. Business will still pay their PAYG when they lodge their BAS or IAS. Eventually once the reporting is proven to be working (may take some time) then the BAS will prefill for you.

What about Payment Summaries?

The end game is for no payment summaries to be required. Again this many take some time, even years before this can happen. Eventually we will simply tick “final payrun” and the figures will be reported as last figures (or payment summary) to the ATO

What if I make errors or need to change a pay that has already been reported?

Adjustments will be made in the current period and your software will always send ‘Year To Date’ totals to the ATO.

What is reported?

Gross wages, PAYG, TFN and employee address are all reported. Superannuation amounts will also be reported.

What if there is Non Paid Super?

The ATO has been testing getting data from the super funds now that most are super stream compliant. Once STP is up and running the data coming back from the super funds will allow them to match and see that the super accrual reported via STP is then paid at the super fund. This will allow the ATO to chase non payers and instigate more in depth audits for those that need them.

When does this start?

The STP legislation was passed in September 2016. The software from the ATO side has been tested as of 1 July 17 with some beta sites. Business will start reporting 1 July 2018.

  • Dates to remember –
    • 1st April 2018 – All business do a head count of staff. (How many staff are you paying?)
    • 1st July 2018 – Any business with more than 20 staff will start reporting back to ATO at each pay event
    • 1st July 2019 – Any business with less than 20 staff will start reporting back to ATO at each pay event (this has recently changed, previously we were advised that under 20 staff would not be reporting. This could have something to do with the first lot of data coming back from the super funds confirming that 5-6% of all super that should have been paid was not paid by businesses to their staff.)

How does STP affect bookkeepers?

Software products will change to suit STP. Setting up new staff – TFN and addresses etc will all be mandatory fields so you will need these details to be able to pay someone.

Bookkeepers will have extra work to do, getting all clients on the correct / current software.

Business will have to get bookkeepers involved as soon as they start to employ staff so that they are reporting correctly to the ATO.

I hope this has helped and if you need any more information on this or any other bookkeeping matters please just ring us at Carbon / WiseClick on 9207 1088.

Until next month,